Wealth creation and passive income streams really can be put on autopilot.
The secret is to implement the absolute best strategy for you.
Your first instinct after reading this title may be to assume automatic means “easy” or “no work”, but that’s a dangerous road to go down.
It’s a simple concept, but it’s not easy or everyone would be wealthy… auto-magically.
Creating a passive income stream means creating automatic income.
Automatic really just means systematic.
There’s a lot of work, sweat, and thinking that goes into building a system that functions automatically though.
The key to creating wealth is to focus on a system with residual cash flow, preferably on a monthly basis.
This is also referred to as passive income and it’s where the phrase passive income streams came from.
Creating multiple sources of passive income is how you create financial freedom and financial freedom is what wealthanizing is all about.
Once you’re financially free, you can continue building your passive income streams as large as you want them to be.
Below is a list of the best strategies for wealth creation through passive income streams.
#1) Understand HOW to Create Wealth with Passive Streams of Income
In the book The Richest Man in Babylon by George S. Clason, the concept of wealth creation is described by the author as creating golden streams of income.
In fact, the book is so well known, it may be where the phrase “passive income streams” originally came from.
The author explains, once you create one golden stream of income you can create multiple golden streams.
These are passive income streams that once created, continue to pay out each and every month.
Create enough of them (or one massive river) and your bank account is automatically replenished each month.
You’re probably wondering how you will think of a new idea or trinket to bring to the marketplace to create these passive income streams.
But in my experience, it’s the implementation that you should focus on!
There are lots of proven models out there you can borrow from and use to build your income stream.
Creativity only pays if it’s applied to an already proven income producing strategy.
Instead of trying to think of something new, focus on something with demand that you know you can fulfill, then go do it.
Most producers of the world are the ones who make money using tried and true methods, not new ones.
They simply execute on proven strategies.
In fact, it’s been said by Mr. Wonderful of Shark Tank that settlers prosper… pioneers get slaughtered.Settlers Prosper... Pioneers get Slaughtered (Mr. Wonderful - Shark Tank) Click To Tweet
Wealth Creation Ideas with Proven Track Records
a) Have a smartphone app built that you can bring to the market.
b) Create a massive network marketing organization
c) Produce quality informational content that you can sell online (through website OR self publish on Amazon)
d) Create “How to” programs in the form of videos that walk people through the nuts and bolts of how to accomplish a task
e) Create a SAAS (Software As a Service) product for local businesses and then provide it for a monthly service fee
f) Rank and Rent– Create local business websites optimized for certain words (like dentist) and rent them out (they must rank for the industry of your end buyers)
g) Offer quality affiliate programs
There are so many ideas you could implement to create a passive income stream and you don’t have to be able to do them all yourself.
For example, you could outsource creating an app, writing a book, or a variety of other things.
It would cost you some money upfront, but there are people who will happily rent their skills for a one time guaranteed fee.
Then you own a product that you can sell over and over, which becomes a golden stream.
Done correctly, this can turn into a golden river (a stream… but bigger!).
2) Adopt a Millionaire Mindset (Change your thinking)
PLEASE (for the love of all that’s Holy)… don’t skip this section.
It may sound like fluff, but the truth is if you don’t change your thinking patterns, nothing will “work”.
You’ll be perpetually looking for that goose to lay the golden egg, instead of building a mechanical goose yourself.
The best part about building your own goose is that after you do it once, you can recreate it again- rinse and repeat.
The truth is, geese that lay golden eggs are not for sale.
Online marketers would have you believe they built one and are selling it… but they aren’t.
Golden geese are self-made and once created, their creators tend to hold on to them.
The problem is you may be tempted to feel defeated when thinking about the big picture.
When you think of being rich or financially independent, you probably think of being a millionaire and having millions of dollars in the bank.
The number can be intimidating.
That can make you think that the process you’ll have to go through to get to your “number” can feel like a daunting task.
In reality it just requires a small shift in thinking.
First, you’ve got to start thinking about how to create those golden streams I mentioned in the section above.
Stop thinking about swimming in the lake (or ocean) those streams will create, instead start focusing on what tasks will get you there.
Again, don’t focus on a number.
Focus on the process of wealth creation and the process of creating passive income streams.
For example, let’s say you’re overweight and need to lose more than 100 pounds to be at your goal weight.
Don’t you dare focus on the 100 lbs. number.
The idea of losing so much can feel impossible.
But if you focus on losing a pound or two a week and commit to making it happen consistently each and every week, it won’t take long before you achieve your goal.
The same thing happens when creating passive income except it can be leveraged.
For example, if you’re losing weight, it’s just you.
There can only be one YOU losing weight.
It’s not leveragable.
What I mean is, you can’t enlist a few friends to help you lose YOUR weight.
However, passive income streams are scalable.
There can be as many as you want to create.
So if you find a way to make $250 a month passively, you can keep that going and then create another stream of revenue.
Then do it again.
Eventually, all those add up and you’ve got some really good income flowing into your bank account.
Too often, we focus so much on the big picture (the 100 pounds we need to lose) that we lose motivation and resign ourselves to our current circumstances or we commit to “trying” something without making a real commitment to change our lifestyle.
For the most part, it’s because we’re overwhelmed and don’t really think we can do it.
Let’s face it, nobody wants to start something they don’t think they can finish.
But if you’re going to create the life you dream about, you’ve got to start thinking about how to get there.
That will require a shift in thinking and you’ll need to adopt a millionaires mindset.The only thing worse than starting something and failing is NOT starting something (Seth Godin). Click To Tweet
The issue isn’t the size of your goal, the issue is you’re focused on the wrong thing.
Shift your thinking slightly and ask yourself this question:
“Do I have a better chance of making and saving enough money in the bank to live off the interest (as the old saying goes) or do I have a better chance of replacing my current monthly income (and more) with a side business?”
The answer is usually the latter unless you’ve already amassed a fortune, in which case you wouldn’t be reading this article.
3) Plug the Leaks – Stop Wasting Money
This is where the rubber meets the road.
No matter what your current monthly income is, if you haven’t already taken a strong look at your expenditures, you’ll need to do that.
Where are you bleeding money?No matter how much blood a doctor transfuses, if they don't stop the hemorrhaging, it's all for nothing. Stop BLEEDING money! Click To Tweet
Imagine your finances like a boat and financial freedom as a destination.
Your boat (income) can get you to financial freedom, but not if it’s leaking.
If it’s leaking you’ll travel slower and depending on the size of the leak, you may sink.
If you find yourself in a sinking ship, you’ll probably need to make some lifestyle changes to make it work.
Once you get to your destination (financial freedom), you’ll have more income and more options.
At that point you can buy a bigger, faster boat if you want to or spend more money on incidentals.
The very first step though, is to look at your current financial situation and figure out where you have money going out that doesn’t need to.
Then re-purpose that money to use it to propel you forward instead of it slowing you down.
There are many ways to do this.
Paying off debt is a way of speeding up your journey.
Saving is a way of speeding up the journey.
Investing in something you can turn a profit on is a way of speeding up the journey.
But spending money you don’t have on things you don’t absolutely need (to impress people you probably don’t like) should always be suspect… it only slows the journey down.
I’m not advocating spending your whole life pinching pennies, but sometimes it needs to be done to get some momentum.
In the beginning, it takes some serious work and soul searching to plug your financial leaks.
But once those leaks are fixed, more of the money flowing in will automatically stay in the coffers until you use it.
Automatic = passive.
4) Use the Wealth Creation and Passive Income Elephant Strategy
One of my favorite questions about goals is “How do you eat an elephant?”
Answer: “One bite at a time”
Lots of people dream about what they would do with great wealth.
But only a small percentage of the world’s population go out and make it happen.
Stop focusing on massive amounts of money or get rich quick ideas and consistently take action on the smaller task of replacing your current income with passive income.
Replacing a portion of your current income with passive income is the first bite of the elephant.
It starts the journey of creating over-abundance in your life.
Once you’ve replaced your income, you’re ready for the next bite.
Mark Zuckerberg may have had big plans for Facebook. Maybe he planned it would get as massive as it is… or maybe he didn’t.
I doubt a college kid could see that big.
Most people can’t.
Either way, he started somewhere and as time went on he could see further down the road.
You’ve got to the same thing in your own life.
Take a few steps and then take some more.
When the stars align and your efforts start gaining momentum, run as hard and as fast as you can.
If you currently make $2500 a month and creating that amount of passive cash flow in your life seems like an elephant, then you’ve got to break it into even smaller pieces.
Try to find ways to earn $500 a month if that seems more manageable.
Because it gets you closer to the larger goal.
Always remember how to eat an elephant…. One bite at a time.
You only need 5 passive income streams or 5 sources of revenue making $500 or more a month to replace $2,500.
One of the biggest problems a person faces when it comes to doing something new is belief.
Your beliefs can work for you… or against you, but if you don’t believe you can succeed in something, you’ll never start.
That’s human nature.
Sadly, belief is why I am talking about small numbers here.
Unfortunately, if I spent time talking about creating $2500 income streams until you have ten, (which would give you $25,000 a month passively), many people would click to a different page.
That’s because they believe it’s not possible for them.
The numbers only go up from there.
This is low hanging fruit my friend.
If you’ve been putting something off or not taking the actions you need to take, then step back and take a serious look at whether or not you believe you can succeed.
Often, the biggest problem can be found between your own two ears – your thinking.
5) Study and Understand the Rules of the Game
Learning should NOT have ended in high school.
For some, learning NEVER STARTED in high school. But I digress…
If you’re playing a game (and wealth creation is indeed a game – with a scorecard), you need to learn the rules.
Bring people to your team who know the rules and can help you navigate the game. (Hint: Get a good tax guy or gal and a mentor who understands passive income streams).
There’s a book in the Rich Dad Poor Dad series (created by Robert T. Kiyosaki) called Retire Young, Retire Rich.
In it, Kiyosaki states that there are three main sources of income. They are…
(1) Earned Income
(2) Portfolio Income
(3) Passive Income
Earned income is old fashioned work for a paycheck income.
This is when you trade time for dollars.
The amount you make depends on how much time you trade and how much your time is worth.
Portfolio income is generated by interest and similar financial investments.
These instruments are technically passive, but the gains are smaller.
The exception would be capital gains, which I believe also falls into portfolio income.
The problem with capital gains (other than the huge tax bill) is that once you stop actively buying and selling whatever you’re getting capital gains on, the game stops (or at least pauses).
Wealth creation is possible with capital gains but it’s much harder to create a passive income stream this way.
Passive income is what we have been talking about here as a main driver of building wealth from scratch.
It’s the most powerful place to start because it’s a way to start small.
By focusing on consistent activity centered around one goal, you can then scale up from that in order to create more passive income.
Regardless of how you decide to build wealth, you’ve got to become an expert on the rules of the game.
Study what others have done and continue to learn. Be a sponge.
In sports, coaches make players do drills and practice the same basic skills over and over.
Practice becomes habit and it’s how perfect execution under pressure occurs.
Repetition is the mother of learning.
The game of money is no different.
Keep practicing and learning.
Over time, your execution on ideas and implementation of strategies will improve.
But if you aren’t constantly feeding your mind with new ideas (books, audiobooks, podcasts, articles, research, etc.), you’ll never learn what you need to learn to be financially free.
Since you’re reading this though, I applaud you.
Seek and ye’ shall find.
6) Use Real Estate for Wealth Creation by Moving More
This comes down to upgrading your house every few years.
This strategy is great but don’t believe a word I write.
Consult your local tax specialist before making any decisions.
This strategy is more about building wealth automatically by leveraging what you’re already doing… which is living in a house.
Did you know that in certain circumstances, you can sell your primary residence and not pay capital gains up to $250,000 (if single) and $500,000 (if married).
Again, this is all about knowing the rules of the game.
There are a few things you have to do to qualify.
- You must own the home two years before selling
- The home must be your primary residence
- You must have lived in the home at least 2 years out of the last 5 years (those two years don’t have to be back to back)
- You can’t have used this strategy in the last two years.
There’s a bit more to it, but those are the biggies.
Again, your tax specialist should guide you through this process and the qualifications before you do anything.
The purpose of this section is to let you know it’s available and also that the qualifications aren’t ridiculous.
Why is Real Estate a Great Wealth Creation Strategy?
First, if you were wise in buying your house and didn’t purchase it at the top of the market, then you should have immediate equity even if the market hasn’t changed.
This option gives you an opportunity to cash out that equity and roll it into another deal.
You simply sell the house and put the profit into the next deal.
The key word there is DEAL.
It must be a bonafide, legitimate deal (that is- under current market value).
For the purposes of building wealth, you absolutely MUST roll that equity into another house.
Don’t just spend it on a vacation for your family to Dubai.
Look for another great deal that will give you instant equity again.
Every time you do this, you’re building up your net worth without paying taxes on it.
This doesn’t fall completely under the umbrella of passive income, but as I mentioned, it is a strategy for moving the needle of wealth in your life.
The reality is that you’re just living in the house day to day, so you aren’t really doing anything different.
In that sense, it qualifies as passive.
If you wanted to, you could also use that tax free money as seed money for a business venture.
As long as it goes back into your long term strategy for wealth creation then you should go for it.
7) Give “House Hacking” a Try
This term I think may have been coined by Brandon Turner of Bigger Pockets.
Regardless of where it came from, it’s a great strategy and a simple one.
The idea is that when you buy a house, you opt for a duplex, triplex, or commercial property with residence, or something else that can be rented out.
By doing this, you can bring down your cost of living because others are helping pay the mortgage on the property.
For example, let’s say you buy a duplex.
Then you rent out one side and live in the other.
If the duplex payment is $1,100 and you’re renting one side for $850, you’re only actually paying $250 for your residence.
If you’re single, you can take this a step further.
Let’s use the same example but assume each duplex unit is a 3 bedroom unit.
You live in one bedroom (say the smallest) and rent out the other two rooms for $250 per room (a great rate).
Now you’ve got positive cash flow going.
Your mortgage is $1,100.
You’re taking in $1,350 ($850 + $250 + $250).
So you actually have a positive cash flow of $250 (excluding expenses).
If you’re in a position to try this, I highly recommend it as a wealth creation strategy to add to your arsenal.
While in college I rented a 3 bedroom home and never once thought about subleasing the other two rooms, even though my landlord was a friend of mine and would have allowed it.
8) Take a Serious Look at Network Marketing
Yes, I went there.
You can click away if you want, but most people only have an understanding of this model that they got from a bad experience.
Have you ever meant somebody who refuses to own real estate because of the headaches?
It’s the same concept.
They can refuse but those headaches can be managed and one bad experience doesn’t change the fact that real estate is an incredible tool for wealth creation and passive income streams.
If you haven’t figured it out yet or if this is the first time you’ve been to my site, I am a firm believer in network marketing as a legitimate wealth building tool.
You may be thinking, “Oh, I don’t want to do that”.
Some good advice here is something I used to tell my high school students when they sat in my office and told me they didn’t feel like doing something.
I’d say, “Do you know how many things I do every day that I don’t want to do? It starts when my alarm goes off and my feet hit the floor”.
Jim Rohn says it best, “Successful people do what unsuccessful people are unwilling to do”.
The point is, network marketing offers the greatest income potential for the lowest risk or any business model out there.
Let’s get back to the topic of this section.
Network marketing and direct sales as an industry has come a long way since it was first introduced.
The world has changed, and with that change has come tremendous opportunity for somebody who isn’t afraid to get out of their comfort zone and try something new.
Unfortunately, it’s gotten a bad reputation.
But if you stop and think about the reasons for that reputation you’ll quickly realize it’s mostly because people either didn’t succeed, got into it with the wrong expectations (it will be easy), or joined the wrong person (their broke buddy said “we’re gonna be rich!”)
The world has changed and industry has changed.
With those changes, it’s become a lot more feasible for an average person to create an above average income in this industry.
6 figure earners used to be the leaders in this industry, now they’re a dime a dozen.
The leaders now now are the 7 figure earners, many of whom are knocking on the doors of 8 figures (and that’s just commissions, not even counting bonuses and incentives).
For a more in depth look at this particular strategy, check out my article about the Best Reasons to Re-Evaluate Network Marketing.
Or, go here to see exactly what we’re doing and how it works.
9) Build and Monetize a Platform (specifically a blog or vlog)
Depending on your comfort with technology and content creation, this can be an incredible option.
Obviously I’m a believer in it because here you are on my blog.
I have no website building experience other than what I’ve taught myself.
The great thing is, you can learn anything online with Google and Youtube (which is actually now owned by Google as well).
If you go the website route, I highly suggest a blog or vlog type website to make it easier to get picked up by search engines.
Just creating a pretty website won’t get any organic traffic and unless you’re a coder, you’re probably not going to create the next social media giant right out of the box.
This website is optimized for speed and SEO, not for prettiness.
I’m focused on doing what works, not on just having a little hobby with cute pages.
Here’s a list of Pro’s and Con’s to think about if you’re thinking about building a website.
- Not expensive to set up or maintain
- Can work on it around your schedule
- You learn a new marketable skill set
- You can positively impact people all over the world
- It positions you as an expert in a niche
- There are tons of ways to monetize (sell info products, ads, coaching, speaking engagements, lead generation, etc.)
- Once set up, your site can bring in leads and/or sales (i.e. profit) automatically 24 hours a day.
- Your reach is virtually unlimited
- Time (time to develop, time to learn, time to rank in search engines, time to create products)
- Cost of Failure– though it’s not expensive money wise (unless you outsource everything), it is a great expense in terms of time, so if you choose this route and don’t have the patience or fortitude to see it through you may want to choose a different route.
- Learning curve – If you’re starting with no knowledge, there is a huge learning curve. But that goes for anything worth doing.
- Some of your stuff (maybe all of it) will NEVER be read unless you also commit to continual education in the field of SEO (search engine optimization). Even then, most of your content may rarely be seen.
- Spam– A relatively easy fix with the right plugins
The CONS section is a little light compared to the PROS section, but that’s how the cards fall.
If I didn’t believe that the Pros outweigh the Cons I wouldn’t be typing right now.
I’d be watching The Walking Dead or Breaking Bad (again).
So focus all your energy and time on building passive income streams and it won’t be long before those streams are larger than the paycheck from your job.
While you’re here, you may want also want to check out our Best Secrets to Building Wealth Fast.
I hope you found this article useful and can utilize the information (or even one idea) as the foundation to start down the road of wealth creation.
If you found it helpful, I would highly appreciate a social media share and/or comment.
If you’re looking for a fun and exciting road to wealth creation and passive income, check out what we’re doing.
Lastly, click the verse below to learn how you can have a personal relationship with Jesus Christ.
Jason & Daniele